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These moves lower in Russian equities come after a big run in 2016; the RSX rose 15 percent in the month following the U.S. election in November as investors bet on better U.S.-Russia political relations.

The process was repeated over and over, as word of cum-ex spread like a quiet contagion. Germany was hardest hit, with an estimated $30 billion in losses, followed by France, taken for about $17 billion. Smaller sums were drained away from Spain, Italy, Belgium, Austria, Norway, Finland, Poland and others

Outrage in these countries has focused on the City of London, Britain’s answer to Wall Street. Less scrutinized has been the role played by Americans, both individual investors and branches of United States investment banks in London, including Morgan Stanley, JPMorgan Chase and Merrill Lynch Bank of America.

American bankers didn’t try cum-ex at home because they feared domestic regulators. So they moved operations to London and treated the rest of Europe as an anything-goes frontier

”There was this culture in London, and it really came from New York,” he said. “These guys were either from New York or trained in London at New York banks, and they looked at Europe as their playground. People at the highest levels were collaborating to rip off countries.”

uffice it to say, the goal was to fool the financial system so that two investors could claim refunds for dividend taxes that were paid just once.

the presiding judge issued a preliminary ruling that, for the first time, declared cum-ex a felony, calling it a “collective grab in the treasury.”

German prosecutors say they will now pursue 400 other suspects, unearthed in 56 investigations. Banks large and small will be ordered to hand over cum-ex profits, which could have serious consequences for some. Two have already gone bust.

officials in Germany say the trade was a form of theft, one so obviously illicit that forbidding it — which was tried twice, with ineffectively worded laws — was hardly necessary.

Precisely who invented cum-ex trading, and when, are mysteries, but ground zero for this scandal may have been the London branch of Merrill Lynch.

At Merrill, Mr. Shields’s job was to identify “tax-attractive trades,” as he put it in his testimony. He had joined one of the least visible sectors of the financial world, which pokes at the seams of international finance law, looking for ways to reduce clients’ tax bills.

When he pointed this out to management, the policy was tweaked.“They said, ‘You can answer a call on your mobile, but you need to immediately move off the floor,’” he recalled. “So these guys would get up from their desks, start walking toward the edge of the floor, send a text message and then walk back. It was a joke.”

The trade was pure theater and required a huge cast: stock lenders, prime brokers, custodians, accounting firms, asset managers and inter-dealer brokers. It also required vast quantities of stock, most of which was sourced from American shareholders.

A lawyer who worked at the firm Dr. Berger founded in 2010, and who under German law can’t be identified by the media, described for the Bonn court a memorable meeting at the office.

Sensitive types, Dr. Berger told his underlings that day, should find other jobs.“Whoever has a problem with the fact that because of our work there are fewer kindergartens being built,” Dr. Berger reportedly said, “here’s the door.”

Seemingly risk-free profits poured in, and over the years a mini-industry thrived, one that a former participant labeled “the devil’s machine.”

When Mr. Tibo tried to signal his concern to executives at UniCredit, the bank’s Italian owner, they didn’t seem to care, he said

“There were big profits coming out of HypoVereinsbank, and most of it was from the investment banking section,” Mr. Tibo said. “The Italians quickly made up their minds: ‘We want to make money.’ No one gave us any internal support, because they didn’t want us to learn anything.”

By then, Mr. Mora and Mr. Shields were long gone from the London branch. Tired of niggling questions and feeling underpaid, they had left in 2008 to open Ballance Capital, one of the first full-service, one-stop cum-ex trading shops.

Dozens of German banks participated in cum-ex deals, too, gobbling up German taxpayer money at the same time they received a rescue package worth more than $500 billion.

Last year, the lawyer who testified anonymously at the Bonn trial described the culture of the cum-ex world to Oliver Schröm and Christian Salewski, two reporters on the German television show “Panorama,” under disguising makeup. It was a realm beyond morality, he said: all male, supremely arrogant, and guided by the conviction that the German state is an enemy and German taxpayers are suckers.

“That was the normal world to which we no longer belonged,” he told the reporters. “We looked out the window from up there, and we thought, ‘We’re the cleverest of all, geniuses, and you’re all stupid.’”

a former Merrill Lynch investment banker sat in a London restaurant near the Thames and described what had turned him into a whistle-blower. In the years after the financial crisis, he said, he noticed that a handful of colleagues on the company’s trading floor were using their personal mobile phones, a breach of company policy. All communication was supposed to be tracked and recorded. These guys were sending self-deleting texts on Snapchat.“Obviously, they were circumventing controls,”

Worried about the growing pileup of tax-withholding credits on the books, Frank Tibo, the bank’s chief tax officer, flew to London in May 2007. He spent the day grilling Mr. Mora

The complaint lays out, in painstaking detail, how the trades were confected, who executed them and which questions should be asked by investigators to uncover the “sham.” It states that Merrill Lynch earned hundreds of millions of dollars over the previous seven years from cum-ex trades.

“Anyone who stood in the way of this trade was swept aside, and those who enabled it were promoted,” the whistle-blower said in a follow-up phone call. “But it was widely regarded as insanity inside the bank for it to be extracting money from sovereign treasuries, particularly after the entire sector had been supported by the public purse.

American banks conducted their cum-ex trades overseas, rather than at home, out of fear, the whistle-blower said. Specifically, he mentioned a 2008 Senate investigation into “dividend tax abuse” that found it was depriving the Treasury of $100 billion every year. The report led to a ban on dividend arbitrage tied to stock in United States corporations.

But nothing prevented American bankers from conducting such trades with foreign companies on foreign soil.

German efforts to stamp out cum-ex with legislation, in 2007 and 2009, left holes through which certain types of financial players could still crawl. This included private pension plans in the United States, a niche financial product for wealthy people who want the kind of privacy, and exotic investment options, that Fidelity doesn’t offer.

Investors will have problems of their own. Many have said they had no idea how cum-ex traders returned such dazzling profits. That defense became less plausible in 2012, after the German government spent millions of dollars to buy 11 hard drives from industry insiders. The hard drives were filled with marketing fliers, written by bankers, who sold cum-ex with an antigovernment pitch.

“We learned that it was very common for these bankers to have conversations over coffee with clients about cum-ex,” said Norbert Walter-Borjans, a former minister of finance for North Rhine-Westphalia. “They would say, ‘If you have a problem with how your hard-earned money is being spent in taxes, we’ve got an idea for you.’”

Authorities across Europe are said to be waiting for a resolution of the Bonn trial to move ahead with their own. Many are livid that Germany didn’t alert them sooner about the perils of cum-ex. The failure, say lawyers, stems from a Europe-wide hypersensitivity about privacy, which is especially acute when it comes to taxes.

In 2012, soon after Germany shut down its cum-ex problem, a London trader began a cum-ex scheme that fleeced the Danish tax authority of $2 billion, officials there say. The trader, Sanjay Shah, who now lives in Dubai, denies wrongdoing but has never been shy about the source of his wealth.When he bought a $1.3 million yacht a few years ago, he found the perfect name: Cum-Ex.

The safe-have U.S. dollar continued to fall.

Markets for risk assets have been on a tear, carrying major stock market indexes to within sight of pre-pandemic, all-time highs.

The rise came as the Nasdaq Composite, S&P 500 and the Dow Jones Industrial Average continued their rise from March

The dollar index fell 0.24%

On Wednesday, the Dow rose 2.05%, the S&P 500 gained 1.36% and the Nasdaq Composite added 0.78%.

The move to riskier assets continued to take down prices for U.S. Treasuries. The yield on the benchmark 10-year reached 0.7333% on Wednesday, up from 0.667% on Tuesday.

Governments around the world have gradually started to lift tough lockdown measures imposed to contain the coronavirus which has infected nearly 6.4 million people and killed over 379,000.

On Wednesday, a report showed that U.S. private payrolls fell less than expected in May, suggesting layoffs were abating as businesses reopen.

the strengthening dollar will destroy more of the jobs typically held by Trump’s blue-collar base. The president may have “saved” 1,000 jobs in Indiana by bullying and cajoling the air-conditioner manufacturer Carrier; but the US dollar’s appreciation since the election could destroy almost 400,000 manufacturing jobs over time.

Republicans can rarely resist the temptation to cut corporate, income and other taxes, even when they have no way to make up for the lost revenue and no desire to cut spending. If this happens again under Trump, fiscal deficits will push up interest rates and the dollar even further, and hurt the economy in the long term

The Nobel laureate economist Edmund S Phelps has described Trump’s direct interference in the corporate sector as reminiscent of corporatist Nazi Germany and fascist Italy. Indeed, if Barack Obama had treated the corporate sector in the way that Trump has, he would have been smeared as a communist; but for some reason when Trump does it, corporate America puts its tail between its legs.

Fifth, Trump is questioning US alliances, cosying up to American rivals such as Russia, and antagonizing important global powers such as China. His erratic foreign policies are spooking world leaders, multinational corporations and global markets generally.

To be sure, expectations of stimulus, lower taxes and deregulation could still boost the economy and the market’s performance in the short term. But, as the vacillation in financial markets since Trump’s inauguration indicates, the president’s inconsistent, erratic, and destructive policies will take their toll on domestic and global economic growth in the long run.

“Currently, from a policymaker’s perspective, it’s a relative balance between managing the spread of the virus and opening the economy.”

But the U.S. stock market benchmark is still down about 25% from its February high.

Even after Friday’s drop, the Dow ended 12.8% higher, its best week since 1938.

Many investors see a strong risk the market could fall deeply again as coronavirus infections increase and more people die, however.

U.S. consumer sentiment dropped to a near 3-1/2-year low in March, according to a survey released on Friday, a day after data showed a record 3 million surge in jobless claims last week.

The Dow Jones Industrial Average .DJI slumped 4.06% to end at 21,636.78 points, while the S&P 500 .SPX lost 3.37% to 2,541.47.

The Nasdaq Composite .IXIC dropped 3.79% to 7,502.38.

Volume on U.S. exchanges was 13.4 billion shares, its lowest since March 5, according to Refinitiv data.

As it turns out, technology demand only increased and the Nasdaq had its best year since 2009, spurred on by low interest rates and a surge in spending on products for remote work.

“Companies that recently raised at very high prices at the height of valuation inflation may be grappling with high burn rates and near-term challenges growing into those valuations,” Shakir told CNBC in an email. “Others that were more dilution-sensitive and chose to raise less may now need to consider avenues for extending runway that would have seemed unpalatable to them just months ago.”

“Our companies heeded that advice and most companies are now prepared for winter,” Lux wrote.

“This time, many of those tools have been exhausted,” Sequoia wrote. “We do not believe that this is going to be another steep correction followed by an equally swift V-shaped recovery like we saw at the outset of the pandemic.”Sequoia told its companies to look at projects, research and development, marketing and elsewhere for opportunities to cut costs. Companies don’t have to immediately pull the trigger, the firm added, but they should be ready to do it in the next 30 days if needed.

And among companies that are still private, staff reductions are underway at Klarna and Cameo, while Instacart is reportedly slowing hiring ahead of an expected initial public offering. Cloud software vendor Lacework announced staffing cuts on Friday, six months after the company was valued at $8.3 billion by venture investors.“We have adjusted our plan to increase our cash runway through to profitability and significantly strengthened our balance sheet so we can be more opportunistic around investment opportunities and weather uncertainty in the macro environment,” Lacework said in a blog post.

Shakir agreed with that assessment. “Like many, we at Lux have been advising our companies to think long term, extend runway to 2+ years if possible, take a very close look at reducing burn and improving gross margins, and start to set expectations that near-term future financings are unlikely to look like what they may have expected six or 12 months ago,” she wrote.

Lux highlighted one of the painful decisions it expects to see. For several companies, the firm said, “sacrificing people will come before sacrificing valuation.”But venture firms are keen to remind founders that great companies emerge from the darkest of times. Those that prove they can survive and even thrive when capital is in short supply, the thinking goes, are positioned to flourish when the economy bounces back.

conditions.”CORRECTION: This story was updated to reflect that cloud software vendor Lacework raised $1.3 billion in growth funding at a valuation of $8.3 billion.

The sales represented roughly 3% of Mr. Bezos’s Amazon holdings, according to the most recently available regulatory filings. He sold almost as much stock during the first week in February as he sold during the previous 12 months.

In recent years, growth stocks, particularly the internet wonders Facebook, Apple, Amazon, Netflix and Alphabet (the parent of Google), have soared

The three largest holdings in the Oakmark mutual fund are Alphabet, Facebook and Netflix, which make up just over 11 percent of its portfolio.

In his view, value stocks “have been beaten down” unfairly. “The market got overexcited by growth,” he said.

Nevertheless, 2020 was still a banner year for growth.

Socially, cryptocurrency is a coordination game; people want to have the coin that other people want to have, and some sort of abstract technical equivalence doesn’t make one cryptocurrency a good substitute for another. Social acceptance—legitimacy—is what makes a cryptocurrency valuable, and you can’t just copy the code for that.

A thing that worked exactly like Bitcoin but didn’t have Bitcoin’s lineage—didn’t descend from Satoshi’s genesis block and was just made up by some copycat—would have the same technology but none of the value.

Here’s another generalization of Bitcoin: Satoshi made up an arbitrary token that trades electronically for some price. The price turns out to be high and volatile. The price of an arbitrary token is … arbitrary?

it’s very interesting as a matter of finance theory. Modern portfolio theory demonstrates that adding an uncorrelated asset to a portfolio can improve returns and reduce risk.

To the extent that the price of Bitcoin 1) mostly goes up, though with lots of ups and downs along the way, and 2) goes up and down for reasons that are arbitrary and mysterious and not tied to, like, corporate earnings or the global economy, then Bitcoin is interesting to institutional investors.

In practice, it turns out that the price of Bitcoin is pretty correlated with the stock market, especially tech stocks

Bitcoin hasn’t been a particularly effective inflation hedge: Its price rose during years when US inflation was low, and it’s fallen this year as inflation has increased.

The right model of crypto prices might be that they go up during broad speculative bubbles when stock prices go up, and then they go down when those bubbles pop. That’s not a particularly appealing story for investors looking to diversify.

one important possibility is that the first generalization of Bitcoin, that an arbitrary tradeable electronic token can become valuable just because people want it to, permanently broke everyone’s brains about all of finance.

Before the rise of Bitcoin, the conventional thing to say about a share of stock was that its price represented the market’s expectation of the present value of the future cash flows of the business.

But Bitcoin has no cash flows; its price represents what people are willing to pay for it. Still, it has a high and fluctuating market price; people have gotten rich buying Bitcoin. So people copied that model, and the creation of and speculation on pure, abstract, scarce electronic tokens became a big business.

He shorted oil and, as a proxy for oil, the Canadian dollar. (That is, he bet against both.) Finally, he shorted U.S. equities.

Last October, he listened to an audiobook by the Hardcore History podcaster, Dan Carlin, called “The End Is Always Near.” “So I had pandemics and plagues in my head,” the Australian said. “In December, I started seeing the first articles about this wet-market thing going on in China, and then in early January there was a lot on Twitter about the shit in Wuhan.” He was in Switzerland on a ski holiday with his family, and he bought all the surgical masks and gloves he could find.

The Australian, who spoke on the condition that his name not be used, is a voluble redhead just shy of fifty.

The problem, he said, was that, perhaps more now than ever, Americans lack what he called “social cohesion,” and thus the collective will, to commit to such a path.

perhaps the government should reward each citizen who strictly observed the quarantine with fifty thousand dollars. “The virus would burn out after four weeks,” he said. The U.S. had all the food and water and fuel it would need to survive months, if not years, of total isolation from the world. “If you don’t trade with China, they’re screwed,” he said. “You’d win this war. Let the rest of the world burn.

I’d been eavesdropping for a week on the friend’s WhatsApp conversation with dozens of his acquaintances and colleagues (he called them the Fokkers, for an acronym involving his name), all of them men, most of them expensively educated financial professionals, some of them very rich, a few with connections in high places. The general disposition of the participants, with exceptions, was the opposite of the Australian’s

they expressed the belief, with a conviction that occasionally tipped into stridency or mockery, that the media, the modellers, and the markets were overreacting to the threat of the coronavirus

They mocked Jim Cramer, the host of the market program “Mad Money,” on CNBC, for predicting a great depression and wondering if anyone would ever board an airplane again. Anecdotes, hyperbole: the talking chuckleheads sowing and selling fear.

it’s hard for a coldhearted capitalist to know just how cold the heart must go. Public-health professionals make a cost-benefit calculation, too, with different weightings.

This brutal shock is attacking a body that was already vulnerable. In the event of a global depression, a postmortem might identify COVID-19 as the cause of death, but, as with so many of the virus’s victims, the economy had a preëxisting condition—debt, instead of pulmonary disease.

“It’s as if the virus is almost beside the point,” a trader I know told me. “This was all set up to happen.”

the “smart money,” like the giant asset-management firms Blackstone and the Carlyle Group, was now telling companies to draw down their bank lines, and borrow as much as they could, in case the lenders went out of business or found ways to say no. Sure enough, by March’s end, corporations had reportedly tapped a record two hundred and eight billion dollars from their revolving-credit lines

In a world where we talk, suddenly, of trillions, two hundred billion may not seem like a lot, but it is: in 2007, the subprime-mortgage lender Countrywide Financial, in drawing down “just” $11.5 billion, helped bring the system to its knees.

It is hard to navigate out of the debt trap. Creditors can forgive debtors, but that process, especially at this level, would be almost impossibly laborious and fraught. Meanwhile, defaults flood the market with collateral, be it buildings, stocks, or aircraft. The price of that collateral collapses—haircuts for baldheads—leading to more defaults.

In New York State, where nearly half a million new claims had been filed in two weeks, the unemployment-insurance trust began to teeter toward insolvency. Come summer, there would be no money left to pay unemployment benefits.

As April arrived, businesses, large and small, decided not to pay rent, either because they didn’t have the cash on hand or because, with a recession looming, they wanted to preserve what cash they had. Furloughed or fired employees, meanwhile, faced similar decisions

On March 20th, Goldman Sachs spooked the world, by predicting a twenty-four-per-cent decline in G.D.P. in the second quarter, a falloff in activity that seemed at once both unthinkable and inevitable. Subsequent predictions grew even more disma

Since 1992, the number of people getting inheritances from parents has nearly doubled even as bequests from grandparents and aunts and uncles have remained flat. Your 50s will be your peak inheriting ages, which makes sense given that an average 65-year-old in the U.S. can expect to live to around age 83 and your parents are, sadly, mortal.

If you look only at the lucky few who inherited anything, their average is $266,00

And if you look only at those in their 70s, it climbs to $344,000. Of course, that’s the value at the time of the gift. Add inflation and market-level returns and many bequests are worth much more by the time you earn your septuagenarian badge.

when we ran the numbers, we found they weren’t random at all.

White folks are about three times more likely to inherit than their Black, Hispanic or Asian friend

it remains vast enough to help explain why the typical White family has more than six times the net worth of the typical Black American famil

Up and down the demographic charts, it appears to be a case of to whom much is given … much more is given

Folks in the bottom 50 percent of earners inherit at half the national rate, while those in the top 1 percent are twice as likely to inherit something.

he confirmed that inheritances make the rich richer. But a rich kid’s true inheritance goes far beyond cash value: In a million less-measurable ways, elite parents give you a head start in life. By the time they die and hand you a windfall, you’ve already used all your advantages to accumulate wealth of your own.

“It’s not just the dollar amount that you get when your parents die,” Ricco said. “It’s the safety net that you had to start a business when you were younger, or the ability to put down a larger share of your savings into a down payment and a house because you know that you can save less for retirement.

“Little things like that are probably the main mechanisms through which intergenerational wealth is transmitted and are not easily captured just by the final value of what you see.”

Just one variable — how much you inherit — can account for more than 60 percent of U.S. wealth inequality

So, if you had to guess someone’s economic station in life and you could peek at only one data point, inheritance would be a pretty good bet. It’s one of the clearest socioeconomic signals on the planet.

“They actually reflect many advantages, many inequalities of opportunities that we face.”

The U.S. tax system does little to temper our uneven inheritance. Consider the stepped-up basis provision, “one of the most egregious (tax loopholes) that we have,”

When you sell something at a profit, you typically pay capital gains tax. But you can avoid that tax by holding the asset until you expire. At your death, the cost basis of your assets gets stepped up to their current value — meaning your heirs avoid getting taxed on what might be a very substantial gain.

Say you’re a natural-soda fan who bought $1,000 of Hansen Natural Corp. stock in 2000. You watched your money grow to more than $1.15 million as sleepy Hansen became the world-eating Monster Beverage Corp. Selling the stock would force you to pay capital gains on more than $1 million in earnings, so instead, you took it to the grave

(If you needed cash, you probably borrowed against your stockpiled stock pile, a common strategy among the 1 percent.)

If your heirs sell it, they’ll pay no taxes. If the value of the stock rises to, say, $1.151 million, they would owe taxes only on that extra $1,000.

Now multiply that loophole by the millions of homes, businesses, equities and other assets being handed down each year

It encourages older folks to hoard homes and businesses they can no longer make full use of, assets our housing-starved millennial readers would gladly snap up.

Early on, Goldwein said, it may have been considered necessary because it was difficult to determine the original value of long-held property. Revenue lost to the loophole was partly offset by a simpler-to-administer levy: the estate tax.

For now, you’ll pay the federal estate tax only on the part of your fortune that exceeds $12.92 million ($25.84 million for couples), and rising to $13.61 million in 2024 — and that’s only if your tax lawyers aren’t smart enough to dodge it.

“Between politicians continuing to cut the estate tax and taxpayers becoming increasingly good at avoiding it, very few now pay it,” Goldwein said. “That means we now have a big net tax break for most people inheriting large amounts of money.”

Kumon presents a convincing explanation: If you didn’t produce a male heir in Japan, it was customary to adopt one. A surplus son from another family would marry into yours. That kept your property in the family.

In Europe, if an elite family didn’t produce a male heir, which happened more than a quarter of the time, the default was for a daughter to marry into another well-off family and merge assets. So while Japanese family lines remained intact from generation to generation, European family lines merged, concentrating wealth into fewer and fewer hands.

As other families compete to marry into the Darcys’ colossal estate — spoiler for a novel from 1813! — inequality increases.

Given a few centuries, even subtle variations in inheritance patterns can produce sweeping societal differences.

“There is no functioning economy unless we control the virus.”But Trump has pinned his re-election hopes on soaring stock markets and record lows in unemployment. Now with stock markets in freefall and jobs set to follow, he seems determined to press ahead and try to relax restrictions on business in an attempt to cure the economic crisis.

Gould said some people were likely not to return to work even if ordered to do so. Secondly, she said, it was clear that state governors – who have shut down so many cities – would resist any move from Trump that could worsen the escalating health crisis.Even in normal times, such a conflict would create a constitutional crisis. In the current situation it could be much worse.

Public health experts, including the senior official Dr Anthony Fauci, have said Americans will need to adhere to physical distancing restrictions for at least several more weeks to stop the spread of the virus.Such chaos would only exacerbate the problems in the wider economy. Stock markets have fallen even as the Federal Reserve pumps billions into the economy, interest rates are cut and the government works on a bailout plan that could end up costing close to $2tn.

Nevertheless, the short-term temptation for Trump to try and push for a return to a normal may prove insurmountable. Not least because as the economic crisis deepens it is clear that his administration made fundamental errors that have exacerbated the situation.Covid-19 can’t be blamed on Trump, but moves he made before the crisis and after it began have substantially worsened the situation – and with it the economy.

No matter how you view it, Greenberger argues, the fact is that the US was woefully unprepared for a pandemic that security agencies had reportedly recently warned it about. Trump has disputed those claims, but there is no disputing that shortly after Covid-19 hit the US it became clear the country was ill equipped to deal with it. Frontline health workers are begging for supplies.

On the present trajectory, it will kill, by late April, more Americans than Vietnam. Having earlier promised that casualties could be held near zero, Trump now claims he will have done a “very good job” if the toll is held below 200,000 dead.

The United States is on trajectory to suffer more sickness, more dying, and more economic harm from this virus than any other comparably developed country.

The loss of stockpiled respirators to breakage because the federal government let maintenance contracts lapse in 2018 is Trump’s fault. The failure to store sufficient protective medical gear in the national arsenal is Trump’s fault

That states are bidding against other states for equipment, paying many multiples of the precrisis price for ventilators, is Trump’s fault. Air travelers summoned home and forced to stand for hours in dense airport crowds alongside infected people? That was Trump’s fault too

Trump failed. He is failing. He will continue to fail. And Americans are paying for his failures.

The lying about the coronavirus by hosts on Fox News and conservative talk radio is Trump’s fault: They did it to protect him

The false hope of instant cures and nonexistent vaccines is Trump’s fault, because he told those lies to cover up his failure to act in time.

The severity of the economic crisis is Trump’s fault; things would have been less bad if he had acted faster instead of sending out his chief economic adviser and his son Eric to assure Americans that the first stock-market dips were buying opportunities.

The fact that so many key government jobs were either empty or filled by mediocrities? Trump’s fault. The insertion of Trump’s arrogant and incompetent son-in-law as commander in chief of the national medical supply chain? Trump’s fault.

sooner or later, every president must face a supreme test, a test that cannot be evaded by blather and bluff and bullying.

Ten weeks of insisting that the coronavirus is a harmless flu that would miraculously go away on its own? Trump’s fault again. The refusal of red-state governors to act promptly, the failure to close Florida and Gulf Coast beaches until late March? That fault is more widely shared, but again, responsibility rests with Trump: He could have stopped it, and he did not.

Those lost weeks also put the United States—and thus the world—on the path to an economic collapse steeper than any in recent memory.

It’s a good guess that the unemployment rate had reached 13 percent by April 3. It may peak at 20 percent, perhaps even higher, and threatens to stay at Great Depression–like levels at least into 2021, maybe longer.

This country—buffered by oceans from the epicenter of the global outbreak, in East Asia; blessed with the most advanced medical technology on Earth; endowed with agencies and personnel devoted to responding to pandemics—could have and should have suffered less than nations nearer to China

Through the early weeks of the pandemic, when so much death and suffering could still have been prevented or mitigated, Trump joined passivity to fantasy. In those crucial early days, Trump made two big wagers. He bet that the virus could somehow be prevented from entering the United States by travel restrictions. And he bet that, to the extent that the virus had already entered the United States, it would burn off as the weather warmed.

If Trump truly was so trustingly ignorant as late as January 22, the fault was again his own. The Trump administration had cut U.S. public-health staff operating inside China by two-thirds, from 47 in January 2017 to 14 by 2019, an important reason it found itself dependent on less-accurate information from the World Health Organization. In July 2019, the Trump administration defunded the position that embedded an epidemiologist inside China’s own disease-control administration, again obstructing the flow of information to the United States.

Yet even if Trump did not know what was happening, other Americans did. On January 27, former Vice President Joe Biden sounded the alarm about a global pandemic in an op-ed in USA Today.

Because Trump puts so much emphasis on this point, it’s important to stress that none of this is true. Trump did not close the borders early—in fact, he did not truly close them at all.

Trump’s actions did little to stop the spread of the virus. The ban applied only to foreign nationals who had been in China during the previous 14 days, and included 11 categories of exceptions. Since the restrictions took effect, nearly 40,000 passengers have entered the United States from China, subjected to inconsistent screenings, The New York Times reported.

At a House hearing on February 5, a few days after the restrictions went into effect, Ron Klain—who led the Obama administration’s efforts against the Ebola outbreak—condemned the Trump policy as a “travel Band-Aid, not a travel ban.”

The president’s top priority through February 2020 was to exact retribution from truth-tellers in the impeachment fight.

Intentionally or not, Trump’s campaign of payback against his perceived enemies in the impeachment battle sent a warning to public-health officials: Keep your mouth shut

Throughout the crisis, the top priority of the president, and of everyone who works for the president, has been the protection of his ego

Denial became the unofficial policy of the administration through the month of February, and as a result, that of the administration’s surrogates and propagandists.

That same day, Secretary of State Mike Pompeo scolded a House committee for daring to ask him about the coronavirus. “We agreed that I’d come today to talk about Iran, and the first question today is not about Iran.”

The president’s lies must not be contradicted. And because the president’s lies change constantly, it’s impossible to predict what might contradict him.

During the pandemic, this psychological deformity has mutated into a deadly strategic vulnerability for the United States.

For three-quarters of his presidency, Trump has taken credit for the economic expansion that began under President Barack Obama in 2010. That expansion accelerated in 2014, just in time to deliver real prosperity over the past three years

The harm done by Trump’s own initiatives, and especially his trade wars, was masked by that continued growth.

The economy Trump inherited became his all-purpose answer to his critics. Did he break laws, corrupt the Treasury, appoint cronies, and tell lies? So what? Unemployment was down, the stock market up.

On February 28, very few Americans had heard of an estimated death toll of 35,000 to 40,000, but Trump had heard it. And his answer to that estimate was: “So far, we have lost nobody.” He conceded, “It doesn’t mean we won’t.” But he returned to his happy talk. “We are totally prepared.” And as always, it was the media's fault. “You hear 35 and 40,000 people and we’ve lost nobody and you wonder, the press is in hysteria mode.”

on February 28, it was still not too late to arrange an orderly distribution of medical supplies to the states, not too late to coordinate with U.S. allies, not too late to close the Florida beaches before spring break, not too late to bring passengers home from cruise lines, not too late to ensure that state unemployment-insurance offices were staffed and ready, not too late for local governments to get funds to food banks, not too late to begin social distancing fast and early

Stay-at-home orders could have been put into effect on March 1, not in late March and early April.

So much time had been wasted by the end of February. So many opportunities had been squandered. But even then, the shock could have been limited. Instead, Trump and his inner circle plunged deeper into two weeks of lies and denial, both about the disease and about the economy.

Kudlow repeated his advice that it was a good time to buy stocks on CNBC on March 6 after another bad week for the financial markets. As late as March 9, Trump was still arguing that the coronavirus would be no worse than the seasonal flu.

The overwhelmed president responded by doing what comes most naturally to him at moments of trouble: He shifted the blame to others.

Trump’s instinct to dodge and blame had devastating consequences for Americans. Every governor and mayor who needed the federal government to take action, every science and medical adviser who hoped to prevent Trump from doing something stupid or crazy, had to reckon with Trump’s psychic needs as their single biggest problem.

Governors got the message too. “If they don’t treat you right, I don’t call,” Trump explained at a White House press briefing on March 27. The federal response has been dogged by suspicions of favoritism for political and personal allies of Trump. The District of Columbia has seen its requests denied, while Florida gets everything it asks for.

The Trump administration is allocating some supplies through the Federal Emergency Management Agency, but has made the deliberate choice to allow large volumes of crucial supplies to continue to be distributed by commercial firms to their clients. That has left state governments bidding against one another, as if the 1787 Constitution had never been signed, and we have no national government.

Around the world, allies are registering that in an emergency, when it matters most, the United States has utterly failed to lead

s the pandemic kills, as the economic depression tightens its grip, Donald Trump has consistently put his own needs first. Right now, when his only care should be to beat the pandemic, Trump is renegotiating his debts with his bankers and lease payments with Palm Beach County.

He has never tried to be president of the whole United States, but at most 46 percent of it, to the extent that serving even the 46 percent has been consistent with his supreme concerns: stealing, loafing, and whining.

Now he is not even serving the 46 percent. The people most victimized by his lies and fantasies are the people who trusted him, the more conservative Americans who harmed themselves to prove their loyalty to Trump.

Governments often fail. From Pearl Harbor to the financial crisis of 2008, you can itemize a long list of missed warnings and overlooked dangers that cost lives and inflicted hardship. But in the past, Americans could at least expect public spirit and civic concern from their presidents.

Trump has mouthed the slogan “America first,” but he has never acted on it. It has always been “Trump first.” His business first. His excuses first. His pathetic vanity first.

rump has taken millions in payments from the Treasury. He has taken millions in payments from U.S. businesses and foreign governments. He has taken millions in payments from the Republican Party and his own inaugural committee. He has taken so much that does not belong to him, that was unethical and even illegal for him to take. But responsibility? No, he will not take that.

Yet responsibility falls upon Trump, whether he takes it or not. No matter how much he deflects and insults and snivels and whines, this American catastrophe is on his hands and on his head.

Mr. Friedman’s cramped vision enhanced the power of the stock market and silenced the voice of workers, leading to profound inequality.

Mr. Friedman’s adherents gained influence in government and the business community. At the same time as Mr. Friedman’s adherents disparaged government’s role, they sought enormous tax subsidies, greatly reducing the share of taxes that corporations paid.

The promise of vital legislative protections against the excesses of unconstrained capitalism — including the National Labor Relations Act, minimum wage laws, the Clean Air Act, the Clean Water Act, antitrust regulations and consumer safety laws, to name a few — were undercut by two generations of ceaseless attack.

The concerns Mr. Friedman lampooned as obsessions of the “contemporary crop of reformers” in 1970 remain urgent problems

As would be expected when business leaders were told not to worry about “providing employment,” wages stagnated and inequality grew.

In the past 50 years, instead of gains for stockholders and top management tracking gains for workers — as characterized by the period when Mr. Friedman wrote — the returns of our capitalist system have become skewed toward the haves.

From 1948 to 1979, worker productivity grew by 108.1 percent and wages grew by 93.2 percent, with the stock market growing by 603 percent.

As would be expected when corporations were told not to worry about “avoiding pollution,” they used their muscle to undermine environmental protection and to conceal the dangers of climate change

As would be expected when corporate leaders were told not to worry about “eliminating discrimination,” corporate political spending was used to help seat elected officials who opposed measures designed to reduce racial disparities in education, pay and wealth, and to support gerrymandering and voter suppression efforts.

By contrast, from 1979 to 2018, worker productivity rose by 69.6 percent, but the wealth created by these productivity gains went predominately to executives and stockholders. Worker pay rose by only 11.6 percent during this period, while compensation for chief executives grew by an enormous 940 percent and the stock market grew by 2,200 percent.

the entire future of humanity is now at risk.

To reverse the Friedman paradigm, companies should embrace an affirmative duty to stakeholders and society. This requires tangible, publicly articulated goals, such as paying living wages to their workers, respecting workers’ right to join a union, promoting racial and gender inclusion and pay equity, enhancing safety protocols, and reducing carbon emissions

In doing so, corporate leaders will also set an example that institutional investors should be required to follow in their own investing and voting policies.

But adopting a stakeholder-centric governance model is only half the battle. Business leaders must support the restoration of fair rules of the game by government; respect the need for strong and resilient public institutions to govern a complex society; pay their fair share of taxes; and stop using corporate funds to distort our nation’s political process

Mr. Friedman wrote the influential essay at a time when economic security was strong, as the New Deal’s principles produced widespread prosperity, reduced poverty and helped Black Americans take their first real strides toward economic inclusion

Since then, the United States has gone backward in economic equality and security — a situation that the Covid-19 pandemic has exposed for all to see

America’s business community should heed these lessons of history and help restore the ideals of fairness, equality and economic common sense that showed that a capitalist economy could work for the many.

in general Democrats now enter the political arena as the party of wealth.

Traditionally, “the right,” for better and for worse, is the party of large property holdings, of bosses and managers and cultural guardians, of dominant belief systems (religious and secular), and of elite education institutions that set the boundaries of what knowledge and lore are proper to pass on to tomorrow’s generations. If America has such a party today, it is not the Republicans.

Biden’s most loyal followers by occupation included professors (94 percent), librarians (93 percent), therapists (92 percent), and lawyers (88 percent)

Trump got homemakers (96 percent), welders (84 percent), HVAC professionals (82 percent), farmers (75 percent), and custodians (59 percent)

They are also the party of education and prestige. On the eve of November’s election, Bloomberg News analyzed which employees gave the most to Donald Trump and which the most to Joe Biden. Biden swept the commanding heights of the economy. He got 97 percent of the contributions at Google and Facebook, 96 percent at Harvard, 91 percent at the consultants Deloitte, and (back here on planet Earth) 90 percent at the New York City Department of Education

Krein doubts whether anything that could be described as Trumpism happened at all. The North American Free Trade Agreement of 1993 was renegotiated to American workers’ advantage, but that did not lead to the renaissance of manufacturing that candidate Trump had tirelessly promised in 2016. The wages of the lowest-paid workers went up, but that may be due to minimum-wage hikes enacted in dozens of states and cities.

“It feels to me like the party’s getting pushed into it,” said Julius Krein, an investor who publishes the quarterly review American Affairs, in an interview this winter. “Donors, especially, don’t want it to be a working-class party. And certainly the old guard not only doesn’t think of itself as such, but is quite hostile to that, and to any policy that could possibly lead in that direction. But it’s getting pushed there because all the elite are going to the Democrats.”

Trump’s administration worked out well for American workers, at least up until Covid hit in the spring of 2020. Unemployment was under 4 percent for most of 2018 and 2019. The good times reached even those to whom prosperity had historically been slowest to arrive. Unemployment among Black men, a whisker under 20 percent in March 2010, had fallen to around 5 percent in November 2019. According to The Economist, gains were concentrated in professions where workers had heretofore faced competition from immigrant labor, such as housekeepers and maintenance workers

the economic hand that Trump had to play in last fall’s elections was stronger than almost anyone outside of the working class understood, and the results—at least in terms of the swing-state popular vote—correspondingly closer.

There is a philosophical disagreement about how one gives the working class more power. To boil it down to the basics, Democrats believe in more unions and Republicans believe in less immigration.

Krein is generally skeptical of the Republican Party’s traditional economic policies. “Contrary to the pervasive mythology of entrepreneurialism and creativity,” he writes, “it is glaringly obvious to today’s professional elite that the neoliberal economy is allocating capital, and especially talent, very poorly.

the extraordinary 2017 tax cuts, the only significant piece of domestic legislation passed in Trump’s four years. A supply-side piñata without precedent, it encouraged the corporate “buybacks” that can spur stock prices (padding executive bonuses) but can destabilize corporate finances (increasing the likelihood of layoffs in a downturn)—quite the opposite of what Trump had seemed to promise on the campaign trail.

Now Rubio has a simpler message: These are my people. I will fight for them. It beats the perennial Republican approach of theorizing about incentives and the capital gains tax.

Among Senate Republicans, it is Rubio who has laid the biggest bet on working people. He has a lot of ideas. He has urged fighting stock buybacks, reauthorizing Small Business Administration loan programs, and limiting Covid aid to universities with endowments of more than $10 billion

The core of his agenda, said Rubio, “is the availability of good-paying jobs that allow people to raise families, to retire with dignity, to live in safe and stable communities—that’s where life is lived.”

Hawley does often sound like a throwback. He criticizes the sexual revolution, the “woke mob,” and those who propose to rechristen military bases named after Confederate generals. In this sense, his appeal to the working class is less direct than Rubio’s. He is using, in classic Reagan fashion, the correlation between working-class status and conservative cultural attitudes to win over voters without making class appeals at all.

In 2008, two young thinkers, Ross Douthat and Reihan Salam, wrote a book called Grand New Party: How Republicans Can Win the Working Class and Save the American Dream. The authors warn that “Sam’s Club Republicans”—cheekily named after a Walmart-owned chain of cut-price warehouse stores where few urban Democrats had ever set foot—were losing ground. And these voters were beginning to notice that their party wasn’t doing anything for them. The old Republican entrepreneurial rhetoric of unleashing this and untrammeling that was ceasing to resonate. Worse, it now served the other party’s base.If Grand New Party was the first call to arms in the remaking of the party, it went largely unheeded

Until recently, few congressional Democrats have been inclined to do battle with the tech companies, Alexandria Ocasio-Cortez and Elizabeth Warren being among the conspicuous exceptions.

Tom Cotton, a Harvard-educated Republican lawyer from tiny Yell County, Arkansas, is trying to use China the way Hawley uses Big Tech

When the public compares the two parties on the question of protecting the working class, it is still Democrats who come out on top—but not by a lot.

In early December, Hawley and Bernie Sanders staggered their speeches, swapping floor time back and forth, in hopes of rallying the chamber to deliver Covid aid in $1,200 direct payments to parents. It was eyebrow-raising, Senate staffers said, because such moments require close staff coordination, and each senator pledged solidarity to the other. “I’m proud to yield the floor to him,” said Sanders of Hawley. “I’m delighted to join with Senator Sanders,” Hawley responded, adding: “Working families should be first on our to-do list, not last.”

The most closely attended-to conservative voice on this issue is Oren Cass, a former Mitt Romney adviser who heads American Compass, a conservative think tank that calls for “widely shared economic development.

Nearly all the Republicans loosely aligning themselves with working-class interests listen to Cass, and it’s partly because he has a theory about the economic history of this century and how it led to our present predicament.

As Cass sees it, the weakness of structures has been explained by the work of M.I.T. economist David Autor, who has given us a new understanding of how labor markets work under globalization.

A “China shock” wiped out a good deal of manufacturing employment after China’s accession to the World Trade Organization in 2001, Autor has shown. “Skill-biased technical change” drove college-educated workers’ compensation up and that of the noncollege-educated down

The economists Anne Case and Angus Deaton gathered similar evidence of the collapse of labor markets and the rise of regional inequality in their 2020 book on opioids, suicide, and life expectancy, Deaths of Despair and the Future of Capitalism.

J.D. Vance, author of Hillbilly Elegy, a book that is often read as an X-ray of how eastern Ohio and other parts of Appalachia were struggling as Hillary Clinton and Donald Trump were vying for the presidency in 2016

the embrace of this coming-of-age saga as an all-purpose explanation of Trump’s new pitch to the working class was misguided, for Vance was already in his thirties when it was published. “The story that he is telling,” Cass insisted, “is of what was going on in the late ’90s, during what we think of as the go-go years, the boom years, the very best years.”

Indeed, an interesting general question arises to challenge Republicans about the 1980s and 1990s—were the policies arrived at outright wrong?

“If you talked to Republicans and gave them truth serum,” one congressional political adviser admitted, “a majority would say we had it wrong for decades on immigration and trade. We were too quick to look just at the lower price of goods and how that ultimately helped people, and didn’t spend enough time looking at people who were directly hurt by factories being closed and lower wages.”

Cass’s central insight is: Tight labor markets are good. That is how unions work to drive up wages, and if conservatives want higher wages, they will need to overcome their “foolish orthodoxy” on the matter.

At the same time, you can’t believe unions are good and say any amount of immigration is fine. Limiting immigration raises wages—which is a key reason that the postwar labor movement supported immigration restrictions

From a supply-and-demand perspective, mass immigration does the same thing as offshoring and de-unionizing: It exposes workers with American labor protections and lifestyle expectations to competition from workers without them

Republicans’ rapport with the working class may turn out to be more natural than it now appears. They won’t have to “come up with” policies for helping the workers, still less to “reinvent” themselves as a working-class party

they will follow the logic of the situation to embrace the sort of policies Democrats followed when they were the party of the workers and the Republicans the party of the bosses.

It isn’t hard to understand why prophets of doom get so much public attention, but how does one explain famous ones being so unimpressive after they become famous?

Numerous studies of expert opinion have shown that pundits are, as a group, as accurate as a coin flip.

The explanation is simple, according to “Predicting the Next Big Thing,” a 2010 study by Jerker Denrell and Christina Fang. People who got rich and famous on extreme bets tend to follow up with more of them, and outlier predictions typically fail.

Mr. Yun predicts sales will remain flat for all of 2018, due to inventory shortages and eroding affordability, as both prices and mortgage rates rise.

A homeowner with a median-priced home in the San Francisco area will receive $4,500 less in housing-related tax benefits in the first year of a 30-year mortgage this year, according to real-estate data company Apartment List. A homeowner in the same position in the New York metro area would receive $1,500 less annually.

Weakness at the high end is being driven by stock market volatility and the $10,000 cap the tax bill placed on deducting state and local property taxes

“People are being a little more cautious than they were before,” Mr. Glazer said. “Buyers have a number in mind, and they’re willing to stick their ground more than in the past.”

Kalena Masching, a Redfin agent in Silicon Valley, said she has seen a pickup in activity in recent weeks as buyers and sellers have digested the implications of the tax bill. Buyers are putting down larger down payments to bring the size of their mortgages below the new $750,000 cap. But that could be a challenge if the stock market continues to fluctuate, because buyers might want to hold on to more of their cash

s. Masching said she is also hearing more from older buyers who are thinking about selling their homes and using the proceeds to retire out of state, prompted in part by the changes to the tax law

“I’m hoping it’s going to be better. We never got any inventory last year,” said Ms. Masching. “The big concern for our sellers is: Where are they going to go?”

Rhian Daniel, a 50 year old who works for a medical startup, and his wife have been looking for a home for about four years, both in the Bay Area and further afield. The couple have largely given up for the moment, and are considering eventually moving to a place like Dallas, with lower home prices and property taxes.

Mr. Daniel’s wife is a therapist, and they both have student debt that limits the size of the mortgage they can get.

The Silicon Valley giant is bidding adieu to its founders, Larry Page and Sergey Brin, whose love of math and disregard for Wall Street once embodied Google’s free spirit. Mr. Page, 46, and Mr. Brin, 46, said last month that they would step down from their executive roles.

Google has also crammed more advertising onto the top of search results and squeezed money out of businesses like YouTube

Google faces other challenges. Regulators and lawmakers around the world are scrutinizing the company for vacuuming up people’s private information and chilling the technology landscape with its market dominance.

For all the changes facing Google, one constant has remained: It is essentially the sole proprietor of the internet’s most lucrative business. Google search is the on-ramp to much of the internet, and placing advertising next to key search terms is a necessity for most businesses, who risk forgoing traffic to a competitor.